What is the relationship between the purchasing power of money and the rate of inflation?

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1093643

2026-05-09 18:25

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Purchasing power of a money is --> For X amount of money u can buy A mount of goods,

Inflation is ---> General price rise in commodities

Rate of inflation ---> the increase/decrease in inflation is subsequent years.

So, naturally, If rate of inflation is high PP of money will go down

B'cuz, Price of products are high, the power of ur money to buy them comes down

So, PP of money and Rate of inflation is inversely related..

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